McCrief v. Wachovia Bank et al
Filing
96
ORDER ADOPTING 86 REPORT AND RECOMMENDATION GRANTING in part and DENYING in part 58 Motion to Dismiss, filed by Wachovia Bank, 46 Motion to Dismiss, filed by Bank of America. The Court dismisses Plaintiffs claim s against Defendants for fraud, conversion, and violation of the South Carolina Uniform Commercial Code. Plaintiffs breach of contract claim is dismissed as to BofA but may proceed as to Wells Fargo. Finally, the Court grants Plaintiff leave to amend his complaint, within fifteen days of this order, to allege special damages regarding his claim for civil conspiracy. Signed by Honorable Richard M Gergel on 3/6/2013. (sshe, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
CHARLESTON DIVISION
Almia J. McCrief,
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)
Plaintiff,
Civil Action No. 2:12-72-RMO
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)
v.
Wachovia Bank a/k/a Wells Fargo Bank,
and Bank of America,
Defendants.
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)
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)
ORDER
This matter is before the Court on the Report and Recommendation of the Magistrate
Judge (Dkt. No. 86) as to the Defendants' separate motions to dismiss (Dkt. Nos. 46, 58). As set
forth below, the Court agrees with and adopts the Report and Recommendation as the order of
the Court.
Background
Plaintiff Almia J. McCrief ("Plaintiff'), proceeding pro se, filed this civil action in state
court which Defendants later removed on January 6, 2012. (Dkt. No. I). Pursuant to 28 U.S.C.
§ 636(b)(I)(A) and Local Civil Rule 73.02(B)(2)(g) DSC, this matter was referred to a
Magistrate Judge for pretrial handling. Construed liberally, Plaintiffs complaint asserts causes
of action against Defendants for breach of contract, fraud, civil conspiracy, conversion, and
violation of the South Carolina Uniform Commercial Code ("UCC"). In this action, Plaintiff is
attempting to recover an alleged $200,000 in cashier's checks which he purchased from
Defendant Wachovia Bank a/k/a Wells Fargo Bank ("Wells Fargo") and delivered to Capital
Consortium Oroup ("CCO"), the payee, in 2006 and 2007, and which were subsequently
deposited into CCO's account at Defendant Bank of America ("BofA"). Plaintiff appears to be a
victim of the large-scale fraud perpetrated by CCO upon many South Carolina citizens.
Defendants filed separate motions to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of
Civil Procedure. (Dkt. Nos. 46, 58). Plaintiff then filed a response in opposition to the motions
to dismiss. (Dkt. No. 82). The Magistrate Judge then issued a Report and Recommendation
("R&R") regarding these motions. (Dkt. No. 86). All parties then filed objections to the R&R.
(Dkt. Nos. 89, 91, 92, 93, 94).1
Legal Standard
The Magistrate Judge makes only a recommendation to this Court. The recommendation
has no presumptive weight, and the responsibility for making a final determination remains with
this Court. Mathews v. Weber, 423 U.S. 261, 270-71 (1976). This Court is charged with making
a de novo determination of those portions of the R&R to which specific objection is made.
Additionally, the Court may "accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(l). This Court may also
"receive further evidence or recommit the matter to the magistrate judge with instructions." Id
Law/Analysis
The Magistrate Judge suggests alternative rulings on Defendants' separate motions to
dismiss: to grant the motions due to Plaintiff's effective failure to prosecute the action, or to
grant the motions in part and deny them in part on their merits. (Dkt. No. 86 at 10). Upon
review of the record and the R&R, and considering Plaintiffs pro se status, the Court will
address the motions on their merits and adopts the Magistrate Judge's recommendations as the
order of the Court.
I Plaintiffs objections filed February 13, 2013 (Dkt. No. 89) appear to have been filed in response to a R&R
regarding Defendants' motions to dismiss which the Magistrate Judge subsequently vacated. (Dkt. Nos. 80, 83).
Plaintiff's other objections (Dkt. Nos. 93, 94) were improperly submitted to the Court via fax and did not contain
Plaintiff's original signature. (See Dkt. No. 95). The Court, however, has considered these filings when ruling on
the present motions.
2
I.
Breach of Contract
The Court agrees with the Magistrate Judge that Plaintiff's breach of contract claim
against BofA should be dismissed, but that his breach of contract claim against Wells Fargo may
proceed. (Dkt. No. 86 at 4-5). As against BofA, Plaintiff has not made any allegation that he
entered into a contract with that bank, nor do the background facts supplied by Plaintiffs
complaint support one.
In contrast, Plaintiff alleges he entered into a consumer account
agreement with Wells Fargo and that his account was subsequently frozen by Wells Fargo in
violation of the agreement. 2 The Court agrees with the Magistrate Judge that these allegations
are sufficient for Plaintiff's claim for breach of contract against Wells Fargo to move forward.
II.
Fraud
The Court agrees with the Magistrate Judge that Plaintiffs claims for fraud against
Defendants should be dismissed. The basis for Plaintiff s claim for fraud is that the Defendants
conspired to accept cashier's checks that had no payee endorsements. (Dkt. No. 1-1 at
~
5).
However, Plaintiff makes no allegation that any representations were made to him, which he did
not know to be false, and upon which he relied. See Ardis v. Cox, 431 S.E.2d 267, 269 (S.C. Ct.
App. 1993) (stating elements for fraud). Therefore, the Court agrees with the Magistrate Judge
that Plaintiff has failed to plead sufficient facts to state a claim for fraud against Defendants.
III.
Civil Conspiracy
The Court agrees with the Magistrate Judge that Plaintiffs civil conspiracy claim fails to
allege facts sufficient to state a cause of action, but that Plaintiff should be granted leave to
amend his claim. Special damages are an essential element to a claim for civil conspiracy which
must be specifically pleaded. Charleston Aluminum, LLC v. Samuel, Son & Co., No. 3:05-2337
2 Wells Fargo objects that Plaintifrs complaint alleges only that CCG's accounts were frozen. (Dkt. No. 91 at 3).
The Court agrees with the Magistrate Judge, however, that Plaintifrs complaint alleges a freezing of his own
account. (See Dkt. No.1-I at 2 n.l).
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MBS, 2006 WL 2370292, at *2-3 (D.S.C. Aug. 15, 2006). Here, Plaintiff has failed to state
specifically what special damages he suffered due to any alleged civil conspiracy. However,
considering Plaintiff s pro se status, the Court agrees with the Magistrate Judge that Plaintiff
should be allowed fifteen days from the issuance of this order to amend his complaint to allege
special damages.
IV.
South Carolina Uniform Commercial Code and Conversion
Finally, the Court agrees with the Magistrate Judge that Plaintiffs claims for violation of
the VCC and for conversion must be dismissed. The core of Plaintiffs allegations is that BofA
deposited cashier's checks without endorsement. However, as noted by the Magistrate Judge, a
purchaser of a cashier's check has no standing to pursue claims on the check against the
depositary bank under the VCC. See Cassello v. Allegiant Bank, 288 F.3d 339, 342 (8th Cir.
2002).
Further, the depositary bank becomes a holder of a cashier's check regardless of
endorsement where its customer at the time of delivery was a holder, whether or not the
customer indorses the item. S.C. Code § 36-4-205(1). In this case, CCG was a customer of
BofA, the depositary bank. Therefore, the Court dismisses Plaintiffs claims under the VCC.
Furthermore, Plaintiffs claim for conversion has been displaced by the VCC and should also be
dismissed. See Flavor-Inn, Inc. v. NCNB Nat'/ Banko/S.C., 424 S.E.2d 534, 536 (S.C. Ct. App.
1992).
Conclusion
As set forth above, the Court adopts the R&R as the order of the Court (Dkt. No. 86).
Accordingly, the Court GRANTS in part and DENIES in part Defendants' motions to dismiss.
(Dkt. Nos. 46, 58). Specifically, the Court dismisses Plaintiffs claims against Defendants for
fraud, conversion, and violation of the South Carolina Vniform Commercial Code. Plaintiffs
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breach of contract claim is dismissed as to BofA but may proceed as to Wells Fargo. Finally, the
Court grants Plaintiff leave to amend his complaint, within fifteen days of this order, to allege
special damages regarding his claim for civil conspiracy.
AND IT IS SO ORDERED.
United States District Court Judge
&,
March
2013
Charleston, South Carolina
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